Over recent times there has been much debate on whether protection plans should include everything as standard or whether clients should only pay for the features they can use. Children’s Critical Illness cover is one protection feature that falls into this category with some insurers offering it as standard, some offering it as standard with optional upgrades and others providing it as an optional add on. This week we take a look at which insurers fall into which camp.
Children’s Critical Illness cover has seen dramatic changes over the past two years with almost every insurer improving their proposition. Where your client has (or is planning to have) children it is important to understand the level of cover being provided and whether enhanced cover could be purchased at an additional cost. This can make obtaining illustrative costs more complicated as for some insurers there may be several options and other insurers may not include children’s cover in their standard quote costs.
Below we consider how children’s Critical Illness is offered by the different insurers in the market;
Where an insurer automatically includes children’s critical illness but offers an optional upgrade, the upgrade will enhance the cover provided.
If a client does elect to pay an additional or increased premium for Children’s cover it is important that that this can be removed when the children become ineligible to claim. Thankfully all insurers allow this and will accept verbal instruction from the client to remove the optional upgrade or full children’s cover from the plan.
In terms of the amount that can be claimed on meeting one of the children’s critical illness definitions, insurers differ greatly. Like with adult additional payment conditions, insurers will usually pay a percentage of the sum assured up to a maximum monetary amount. Below we look at what the maximum percentages and monetary amounts are based on whether the child is claiming for a full payment condition or an additional payment condition.
Some insurers may pay more if both parents are covered.
*Guardian and Vitality enable the client to choose a sum assured up to £100,000 when adding children’s critical/serious illness. The minimum sum assured is £10,000 for Guardian and £20,000 for Vitality
**LV= will pay a maximum of 50% of the amount that would have been paid to an adult suffering from the condition being claimed for
***Royal London’s standard children’s critical illness does not cover additional payment conditions.
****Scottish Widows’ children’s critical illness does not cover additional payment conditions but does pay less for children specific conditions.
On top of the standard payment amounts, some insurers will pay an additional amount in certain scenarios. AIG, Old Mutual Wealth and Zurich (Zurich Select Plans only) will all double the amount paid if there is no UK treatment for the condition, but treatment could be obtained overseas. Aviva also offer a similar benefit with Global Treatment which gives access to worldwide medical specialists and covers the cost of overseas treatment for certain serious illnesses or medical procedures, however unlike the others, this is a paid for extra.
LV= will double the amount paid for ten specific conditions if the cause is a direct result of an accident.
Children’s Terminal Illness is another benefit where insurer differ greatly and not all insurers include this in their plan. Where insurers offer an optional upgrade to child critical illness, terminal illness will generally not be covered in the standard cover.
Of those that do offer terminal illness the amount they will pay again varies enormously. AEGON, AIG, Guardian, LV= and Royal London (enhanced child) will all pay the same amount for a child terminal illness as they would if the child suffered from a full payment condition. Aviva (Upgraded Child), Legal & General (CCIx) and Old Mutual Wealth will pay a fixed monetary amount of £10,000. If the condition that has led to the terminal illness prognosis qualifies as a full or additional payment condition, Old Mutual Wealth will pay the relevant critical illness payment as well as the terminal illness payment of £10,000.
The debate on whether features should be included as standard or as optional add-ons will keep raging. The ability to include or exclude certain features is certainly desirable as why should a client pay for something that they will never use? On the other hand, will we put off clients by presenting them with a long list of costs which highlight the different variations available to them? It is certainly an interesting debate.
Of those that automatically include children’s critical illness in their plans, AIG have a particularly high payment amount and will also double the amount paid if treatment can only be obtained overseas. Of those that provide children’s critical illness as an optional extra, Guardian seem to offer a combination of high potential sum assured and the most flexibility.